Opinion
Case No. 97-19101-SSM, Contested Matter No. 97-3522
January 5, 1998
Mr. George B. Martin-Trigona, Lauderdale, FL, for Debtor pro se
Ms. Helen V. Martin-Trigona, Alexandria, VA, for Co-debtor pro se
Randa S. Azzam, Esquire, Shapiro Burson, Fairfax, VA, of Counsel for Mellon Mortgage Co.
MEMORANDUM OPINION AND ORDER
Before the court are two motions for a continuance of the hearing scheduled for January 5, 1998, on Mellon Mortgage Company's motions, both filed on December 18, 1997, (a) for relief from the automatic stay and co-debtor stay and (b) to dismiss this chapter 13 case with prejudice. One of the continuance motions (docket item 16) was filed by the debtor on December 29, 1997. The other (docket item 20) was filed by the debtor's mother, Helen V. Martin-Trigona — who is named in the relief from stay motion as the co-debtor — on December 30, 1997. Mellon Mortgage Company has filed a response opposing any continuance.
Background
The debtor, George B. Martin-Trigona, who is proceeding pro se, filed a voluntary chapter 13 petition in this court on December 3, 1997. The meeting of creditors under § 341, Bankruptcy Code, is scheduled for January 7, 1997. The petition was not accompanied by schedules, a statement of financial affairs, or a plan. The current case is the third chapter 13 case the debtor has filed in this court. His first petition, filed on November 22, 1993, was dismissed on January 10, 1994, without a plan having ever been filed. His second petition, filed on May 6, 1994, was dismissed on motion of the chapter 13 trustee on January 27, 1997. Additionally, his mother, Helen V. Martin-Trigona, has filed two chapter 13 cases in this court: the first, filed on February 8, 1993, was dismissed on May 21, 1993, and the second, filed on July 14, 1997, was dismissed on October 8, 1997, with prejudice to refiling under any chapter of the Bankruptcy Code for 180 days.
Case No. 93-14875-MVB.
Case No. 94-11777-SSM.
Case No. 93-10522-DOT.
Case No. 97-15156-SSM.
On December 18, 1997, Mellon Mortgage Corporation, asserting that it is the holder of a first-lien deed of trust against real property in which both the debtor and his mother claim an interest, filed a motion for relief from the automatic stay and the co-debtor stay in order to foreclose under its deed of trust. The motion recites that the debtor holds only bare legal title to the property, with the debtor's mother being the beneficial owner under a recorded trust agreement, and that, by virtue of their successive chapter 13 filings, the debtor and his mother have been successful in blocking foreclosure for nearly four years, each chapter 13 filing being on the eve of a scheduled foreclosure sale. The motion to dismiss with prejudice alleges essentially the same facts.
The motion alleges that the current case was filed one day prior to a scheduled foreclosure sale.
On December 22, 1997, the debtor filed a motion to extend until January 2, 1998, the time for filing schedules, a statement of financial affairs, and a plan. Those motions were granted by the clerk, under the authority of Local Bankruptcy Rule 1007-1, to December 31, 1997. The debtor filed a plan on December 30, 1997, but has not filed schedules or a statement of financial affairs. On motion of the standing chapter 13 trustee, an examination of the debtor under Federal Rule of Bankruptcy Procedure 2004 has been scheduled for January 7, 1998, the same date as the meeting of creditors.
The plan filed by the debtor proposes to pay the chapter 13 trustee $300 per month for 36 months. The plan states that the debtor has no unsecured debts, and it is not clear what claims would be paid by the trustee out of the payments received. The plan provides no specific treatment for the claim of Mellon Mortgage Company. For example, it does not state whether the debtor intends to make current (i.e., post-petition) payments on the note secured by Mellon's deed of trust. It states only that the debtor would promptly list the property for sale "for an amount sufficient to pay all . . . creditors," and that, if the property were not sold within two years of the confirmation of his plan, it would be sold at auction by the chapter 13 trustee. The continuance motions filed by the debtor and his mother allege that they received notice of the January 5th hearing too late to enable them to make timely travel arrangements, and that all flights from Fort Lauderdale, Florida to Virginia are booked through January 7th or 8th. The debtor represents that he "does not have all the documents necessary [to] answer . . . the Motion for Dismissal" because some of the files "are in his home in Virginia," and that he "needs time to come back to Virginia and to hire an attorney to represent him." His mother's motion similarly represents that she "does not have her files with her on her vacation," thereby making it "impossible to write a proper reply to the complaint."
Helen Martin-Trigona has signed the plan as "seen and consented to," presumably because of her beneficial interest in the property and the fact that the plan provides for its sale.
The court takes judicial notice that the debtor's prior chapter 13 case likewise provided for the debtor to sell the property, and for the chapter 13 trustee to sell the property if the debtor failed to do so within the plan period. After the sale period passed, and the trustee attempted to sell the property, the case was dismissed.
The debtor's petition lists his residence address as Ft. Lauderdale, Florida. His mother's motion states that she was visiting him in Florida for the Christmas holidays when she learned of Mellon's motion.
Since the meeting of creditors is scheduled for January 7th, this suggests that the debtor is likely not to be present.
Discussion
A motion for continuance of a scheduled hearing is addressed to the sound discretion of the court. United States v. Colon, 975 F.2d 128, 130 (4th Cir. 1992). On the one hand, it is clearly in the interest of justice to afford affected parties an adequate opportunity to prepare for hearings that may significantly impair their interests. Although bankruptcy litigation could aptly be characterized as expeditious by comparison with general civil litigation, at the same time the court would be loath to so deify the maxim, "Justice delayed is justice denied," as to effectively deprive a party of his or her day in court. Colon, 975 F.2d. at 130 ("While timely resolutions of disputes are important, there cannot be an `unreasoning and arbitrary "insistence on expeditiousness in the face of a justifiable request for delay.'"") Put another way, the right to a hearing would be hollow indeed if a party were not given an adequate opportunity to prepare for it.
At the same time, the present litigation is hardly a bolt out of the blue. It was the debtor, after all, who invoked the jurisdiction of this court by filing the chapter 13 petition. Four prior chapter 13 petitions have been filed by the debtor and his mother with the apparent primary purpose of preventing Mellon from enforcing the lien of its deed of trust. Given the record of prior filings, it is difficult to imagine why the debtor would legitimately not have been able to file complete schedules, a statement of financial affairs, and a plan with his petition, let alone within the 15 day grace period given by Federal Rules of Bankruptcy Procedure 1007(c) and 3015(b).
Additionally, while ordinarily there would be no particular urgency in scheduling a hearing on the motion to dismiss, the same cannot be said with respect to the motion for relief from the automatic stay. Under § 362(e), Bankruptcy Code, the automatic stay terminates 30 days after a motion for relief from the stay is filed unless, within such 30 day period, the court holds a preliminary hearing and makes a finding that there is a reasonable likelihood that the debtor will prevail at a final hearing. Furthermore, the order dismissing Helen V. Martin-Trigona's most recent case "with prejudice" ensures only that she cannot refile — thereby invoking the automatic stay with respect to her beneficial interest — prior to April 6, 1998. Thus, unless a prompt hearing is held, any relief granted Mellon in the present case might well be illusory, since as a practical matter there would be little to prevent the debtor's mother from blocking foreclosure with a strategically-timed chapter 13 filing of her own.
The final hearing must be concluded within 30 days of the preliminary hearing unless the parties consent to a longer time or the court finds compelling circumstances.
The order dismissing Helen V. Martin-Trigona's case with prejudice to refiling for a period of 180 days was entered on the docket on October 8, 1997. Measured from that date, the 180 day period would extend through April 6, 1998. However, Ms. Martin-Trigona filed a timely motion under F.R.Bankr.P. 9023 to alter or amend the order, and the order disposing of that motion was not entered on the docket until November 10, 1997, at which time the dismissal order became final for the purposes of appeal. It is at least arguable, therefore, that the 180 days runs from November 10, 1997, which would mean that Ms. Martin-Trigona is not eligible to file another petition prior to May 9, 1998. That issue, however, is not properly before the court at the present time, and the court declines to express an opinion.
In the present case, the equities weigh heavily against further delay. If, as seems uncontroverted, the debtor is the holder only of bare legal title and is not the beneficial owner, relief from the automatic stay would seem almost a foregone conclusion. See, Chase Manhattan Bank v. Walt Robbins, Inc. (In re Walt Robbins, Inc.), 129 B.R. 452, 455-56 (Bankr. E.D. Va. 1991) (Tice, J.) (although automatic stay applied to debtor-trustee's bare legal title, the lack of benefit to the bankruptcy estate from the legal interest constituted cause for relief from the automatic stay). That may or may not be the case, and the court will reserve judgment on that issue until it has received evidence at the hearing. However, the record of serial filings by the debtor and his mother, coupled with the failure to file schedules and a statement of financial affairs, suggests very strongly that the present case was not filed for the legitimate purpose of permitting the debtor to restructure and repay his debts but simply to delay a creditor who has been held at bay now for a period of nearly four years. To postpone the scheduled hearing under such circumstances — particularly given the lack of specificity in the continuance motions as to the general nature of the evidence and defenses the debtor and his mother would present if a continuance were granted — would simply make the court an accomplice in the scheme of delay.
By separate order, the court has granted that portion of the motion for relief from the automatic stay seeking termination of the automatic stay and the co-debtor stay with respect to enforcement of Mellon's lien against the real estate, but the court reserved ruling on Mellon's request for an injunction prohibiting further filings and for a declaration that further filings would not create an automatic stay, and the court set a further hearing on those issues to be held on January 27, 1998, at 1:30 p.m. The court also determined that dismissal of the case was premature at this time and set a further hearing on that issue for January 27, 1998, at 1:30 p.m. Accordingly, the motion for continuance, as it applies to Mellon's motion to dismiss with prejudice, is effectively moot.
ORDER
For the foregoing reasons, it is
ORDERED:
1. The motions of George B. Martin-Trigona and Helen V. Martin-Trigona for a continuance of the hearings on January 5, 1998, of the motion filed by Mellon Mortgage Company for relief from the automatic stay and the co-debtor stay are DENIED.
2. The motions of George B. Martin-Trigona and Helen V. Martin-Trigona for a continuance of the hearings on January 5, 1998, of the motion filed by Mellon Mortgage Company for dismissal of the debtor's case with prejudice are DENIED as moot in light of the further hearing the court has set on that motion.
3. The clerk will mail a copy of this memorandum opinion and order to the debtor, the co-debtor, counsel for Mellon Mortgage Company, and the standing chapter 13 trustee.